Is the issuance of invoices for transporting postal items from Vietnam to foreign countries at 0% or 10%?

Is the transportation of postal items from Vietnam to foreign countries exempt from VAT?

The entities exempt from VAT are stipulated in Clause 10, Article 4 of Circular 219/2013/TT-BTC as follows:

Entities Exempt from VAT

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10. Public postal, telecommunications services and universal Internet services under the program of the Government of Vietnam; Postal, telecommunications services from abroad into Vietnam (incoming direction).

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Therefore, the transportation of postal items from Vietnam to foreign countries is not exempt from VAT.

Is the issuance of invoices for the transportation of postal items from Vietnam to foreign countries subject to 0% or 10% VAT?

Cases where the 0% VAT rate is not applicable are prescribed in Clause 3, Article 9 of Circular 219/2013/TT-BTC (amended by Clause 5, Article 1 of Circular 26/2015/TT-BTC, amended by Clause 2, Article 1 of Circular 130/2016/TT-BTC) as follows:

0% VAT Rate

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3. Cases where the 0% VAT rate is not applicable include:

- Reinsurance abroad; technology transfer, transfer of intellectual property rights abroad; capital transfer, credit foreign investment, security investment abroad; derivative financial services; outgoing postal and telecommunications services (including postal and telecommunications services provided to organizations, individuals in non-tariff zones; prepaid phone cards exported abroad or into non-tariff zones); exported products are natural resources, minerals as guided in Clause 23, Article 4 of this Circular; tobacco, alcohol, beer imported then exported; goods, services provided to individuals not registered for business in non-tariff zones, except otherwise provided by the Prime Minister of the Government of Vietnam.

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In addition, Article 11 of Circular 219/2013/TT-BTC stipulates the 10% VAT rate as follows:

10% VAT Rate

The 10% VAT rate applies to goods and services not specified in Articles 4, 9, and 10 of this Circular.

The VAT rates specified in Articles 10 and 11 are applied uniformly for each type of goods and services at stages of import, production, processing, or commercial business.

Example 50: Apparel products are subject to a 10% VAT rate, then these products are subject to a 10% VAT rate at the stages of import, production, processing, or commercial business.

Scrap and defective products reclaimed for recycling and reuse when sold are subjected to the VAT rate applicable to the scrap and defective products sold.

Business establishments dealing in various goods and services with different VAT rates must declare VAT according to the prescribed VAT rates for each type of goods and services; if a business establishment does not determine according to each VAT rate, it must calculate and pay tax at the highest VAT rate for goods and services that the establishment produces, trades.

During implementation, if there is a case where the VAT rate in the VAT Tariff Schedule according to the Preferential Import Tariff Schedule is inconsistent with the guidance in this Circular, the implementation shall follow the guidance in this Circular. If the VAT rate applied is inconsistent for the same type of imported and domestically produced goods, the local tax authority and local customs report to the Ministry of Finance for promptly uniform implementation guidance.

Therefore, for the service of transporting postal items from Vietnam to foreign countries, the invoice is issued with a 10% VAT rate.

Is the issuance of invoices for transporting postal items from Vietnam to foreign countries at 0% or 10%? (Image from the Internet)

When is the time for calculating VAT for the service of transporting postal items from Vietnam to foreign countries?

The time for calculating VAT is based on Clause 2, Article 8 of Circular 219/2013/TT-BTC as follows:

Time for Determining VAT

1. For the sale of goods, it is the time of ownership or use rights transfer of goods to the buyer, regardless of whether payment has been collected.

2. For service provision, it is the time of service provision completion or the time of service provision invoice issuance, regardless of whether payment has been collected.

For telecommunications services, it is the time of completing the reconciliation of data on telecommunication service charges according to the economic contract between telecommunications service business establishments but no later than 2 months from the month of telecommunication service charge occurrence.

3. For electricity and clean water supply, it is the date recorded on the meter for electricity, water consumption, which is listed on the billing invoice.

4. For real estate business activities, infrastructure construction, house construction for sale, transfer, or lease, it is the time of money collection according to the project implementation progress or money collection progress recorded in the contract. Based on the collected amount, the business establishment declares the VAT on the output incurred during the period.

5. For construction, installation activities, including shipbuilding, the time is upon acceptance, handover of the work, work item, construction, installation volume completed, regardless of whether payment has been collected.

6. For imported goods, it is the time of customs declaration registration.

Therefore, the time for calculating VAT for the service of transporting postal items from Vietnam to foreign countries is the time of service provision completion or the time of service provision invoice issuance, regardless of whether payment has been collected.